The Foundation for Affordable Housing and Vitus are planning to redevelop the Franklin School Apartments using low-income housing tax credits.

The tax credit process through the Montana Board of Housing, requires that the city commission hold a public hearing on whether the project meets a community housing need.

Commissioners held that hearing on Sept. 17 and Kathy Buss, a Missoula-based attorney, presented the details on behalf of the developers.

The apartments at 820 1st Ave. S.W., and 813 and 821 2nd Ave. S.W. were originally built in 1910 with major renovations in 1980 and 2001.

The 40-unit property currently offers rent-restricted homes to eligible residents meeting income requirements.

The complex has two buildings with 40 three-bedroom garden style residential units on a 1.54-acre lot, as well as on-site laundry facilities, leasing office, playground and off-street parking for residents.

The developers are also planning to apply for a tax exemption available under state law for qualifying-low income housing tax credit projects.

Low-income housing tax credits are a federal tax credit that service as a financing source for rent and income restricted housing. They’re administered by the Montana Board of Housing.

The developers are seeking the assignment and renewal of a housing assistance payments contract for the property through the U.S. Department of Housing and Urban Renewal. That contract will preserve affordability of the units.

Buss said they’re looking to extend that contract for another 30 years.

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They’re also pursuing rent and income restrictions through a Montana Board of Housing declaration of restrictive covenants for low-income housing credits that will continue to restrict the property and require units to be rented to income-eligible tenants at reduced rates, according to the developers.

They’re targeting tenants at 50 percent and 60 percent of area median income.

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The rehabilitation work includes energy efficient upgrades, such as upgrading the plumbing fixtures with low flow fixtures, replacing lighting fixtures with high efficiency lighting, and replacing certain appliances with Energy Star qualified appliances; evaluation and completion of necessary safety improvements, including exterior lighting, locks, signage, fire protection systems, and other security features; rehabilitation and upgrades to playground, leasing office and laundry area; modifications and improvements to common spaces and dwelling units to improve ADA accessibility.

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Buss told commissioners that the developers are planning to rehabilitate in place, meaning residents shouldn’t be displaced during the project and if displacement is necessary, it would likely be for a week or less and the developers will provide housing and a stipend.

She said they’ll work with tenants to provide minimal disruption during the project.